"This decision reflects upon the world-class capabilities of our Puerto Rico operations, and is a testimony to the talent and skill of our local work force," said Harry Rodriguez, divisional vice president and general manager of Abbott’s Puerto Rico Operations.

The plant is part of the company's plan to ensure long-term production capacity for commercial biotech products such as HUMIRA™, also known as D2E7, which will treat rheumatoid arthritis.

The new plant will add an additional 107 acres to the existing Abbott Puerto Rico Operations site. Construction is already underway.

"We will do our own lab testing and manufacturing," Rodriguez said. "When all phases are complete, the plant will comprise of 300,000 square feet of manufacturing, testing, warehousing and office space."

The company hopes construction will be complete by 2004. Rodriguez foresees the project creating 250 new jobs.

Of all the Caribbean's islands, Puerto Rico's economy is the most advanced thanks to such heavyweights as Abbott, Eli Lilly, Amgen, Merck Sharp & Dohme, MOVA and others. The pharmaceutical industry is big business in Puerto Rico, as is chemicals, medical devices, electronics and food processing.

Currently, 18 pharmaceutical companies have operations on the island — five have corporate offices and 37 have manufacturing operations.

To encourage further development are economic development initiatives. Law No. 109 grants a tax credit equal to 50 percent of the case used to acquire an exempt business that would otherwise close operations in Puerto Rico. Law No. 110 increases from 10 percent to 25 percent the credit for purchasing products manufactured in Puerto Rico.

Other pro-business laws help with business expenses such as depreciation of buildings, equipment, and machinery, training and R&D. Consequently, Puerto Rico has the largest high-tech cluster of companies in the Caribbean region.

Tax Benefits

Some countries are more suited for light assembly than big production and benefit from U.S. programs such as the Caribbean Basin Initiative (CBI). CBI is a broad program to promote economic development through private sector initiatives in Central America and the Caribbean islands. The goal is to expand foreign and domestic investment in nontraditional sectors, diversifying CBI country economies and expanding their exports.

CBI not only gives duty-free entry to the United States for a range of products manufactured in CBI countries, but the United States gives economic assistance to aid private-sector development. This aid comes in the form of financing essential imports and by establishing development banks, chambers of commerce, skills-training programs, industrial free zones and other essential infrastructure.

Curacao in the Netherlands Antilles offers two free trade zones, the Harbor Free Zone and the Airport Free Zone. The Harbor Free Zone primarily attracts trading companies that distribute products from the United States, Europe and Asia to the Caribbean and Latin America. The Airport Economic Zone highlights services that can be provided through the Internet.

Both can serve as Caribbean logistics centers for air or sea transshipments. The biggest benefit is the tax exemptions.

Syracuse, N.Y.,-based North American Assemblies Ltd. chose to assemble cable TV filters on St. Lucia because of tax benefits.

“We do 90 percent of the production assembly here, then complete the product in the United States,” said Roston Taylor of North American Assemblies. “All of the filters are shipped by air."

Overdrive Inc., a Cleveland-based company, chose to set up its electronic publishing and distribution business at Montego Bay, Jamaica, for a host of reasons.

"We saw a growing need for digital content, whereby publishers would want to put information and books into new formats," said Steve Potash, president of the company. "Jamaica was attractive because it is located in Eastern Standard Time zone, offers the largest English speaking population in the Caribbean, excellent infrastructure and the best cost of labor for highly skilled technical workers."

Telecom, Call Centers

The telecom sector is booming in the Caribbean. Cable & Wireless has a major presence on St. Lucia. Ireland's Digicel has made investments on Jamaica, as well as Trinidad and Tobago.

"Jamaica has one of the most sophisticated telecom systems in the Caribbean," said Seamus Lynch, CEO of Digicel Jamaica.

By investing in excess of $225 million in Jamaica, Digicel has become a major contributor to Jamaica's national income and to employment creation for hundreds of Jamaicans, both directly and indirectly.

"We can resell capacity to companies and provide broadband cost effective service," Lynch said.

The big push came in April 2001, when Digicel launched its GSM mobile service in Jamaica and hit a customer mark within 100 days of the launch, well ahead of schedule.

In recent years, call centers and customer relations management (CRM) activities have emerged as a significant growth sector in Barbados. Call center companies on the island include Cable & Wireless, Shell Antilles, ICT and Technion Inc.

These firms have found many advantages to locating their call centers on Barbados. Among them are its modern, reliable telecommunications infrastructure; a service-oriented, trainable work force; competitive labor costs; and high levels of worker productivity. This, coupled with available office accommodations in full-serviced business parks, geographic proximity to North America and exceptional social, political and economic stability add to the island's appeal as a cost-effective location for international call centers.

Banking, Accounting Firms

The Bahamas is billing itself as a financial center. The goal of Bahamian officials is to rival London, New York, Switzerland, Hong Kong and Singapore. Meanwhile, Barbados has attracted an impressive share of high-profile banks and accounting firms such as Citibank, the Royal Bank of Canada, Ernst & Young and PricewaterhouseCoopers.

"Barbados continues to be attractive to investors as a suitable place in which to conduct international business,” said Ben Arindell, a partner and specialist in international tax with Ernst & Young. “This continuing success has been achieved through a number of factors including a sound regulatory environment, generous tax and other concessions, and a growing tax treaty network."

Meanwhile, islands like Grenada benefit from assistance it receives from the Caribbean Development Bank (CDB) and the International Fund for Agricultural Development (IFAD) for the Grenada Rural Enterprise Project (G-REP). The project is designed to address rural poverty and includes support for community mobilization and development.

Seaport Competition

All eyes remain on are on the Free Trade Area of the Americas (FTAA), slated for 2005, which will further enable the free movement of goods and services between North America and South America. With the potential for business to increase, a battle is waging in the Caribbean over which port will become that region's major port. The big contenders are Kingston, Jamaica; Dominican Republic; Freeport, Grand Bahamas; and Puerto Rico.

"Geographically, we are well-positioned for both East-West and North-South, including traffic via the Panama Canal," said Jorgen Palmbak, general manager of APM Terminals Jamaica Ltd. "But we are not alone with our good location. Fortunately, we have a port authority with a clear vision of the future."

The port offers two terminals consisting of two berths each on the North Terminal and four berths each on the South Terminal. Improvements were recently completed to the port that expanded its berthing space to 5,355 feet. The staging ground can easily be expanded into an area adjacent to the port that currently operates as a free zone.

"Consequently, the port authority has earmarked 400 acres of land for an expansion," said Warren Sweeny, Credit Services Manager of APM Terminal.

A major advantage to Jamaica is its domestic market is much larger than that of The Bahamas or the Dominican Republic. Yet Rio Haina Terminal in the Dominica Republic offers fast productivity and efficient terminal operations. Officials there taut the terminal's location in close proximity to one of the largest industrial areas and free trade zones on the island.

Grand Bahamas Port Authority's Freeport Harbour has stirred terrific attention when Hutchinson Whampoa Ltd. of Hong Kong developed its $158 million container transshipment hub.

Unlike the other islands, Puerto Rico's domestic market is unparalleled to any other Caribbean nation.

"We moved 2.1 million TEUs [20-foot equivalent units] in 2002," said Edgardo Torres, assistant secretary for Strategic Projects. "No other port in the Caribbean handles so much cargo."

While Puerto Rico's Port of the Americas is currently on the drawing board, officials see great potential for transshipments, as well as foreign trade zones.

"By December, we hope to have permits to begin dredging," Torres said.

Officials are looking to have a private operator run the port. Several big names have expressed interest.